The monetary problems dealing with rural health care are undeniably complex and as such require out-of-the-box options. One service being tested today is a new funding system in which public and personal insurance companies swimming pool funds to pay for a defined set of services to a specific community.
Present in the last suggestions released by the American Hospital Associations Future of Rural Health Care Task Force in May, the solution would give participating health centers access to funds from the swimming pool, which they would utilize to provide agreed-upon core services, like main care, emergency departments and maternal care.
By and big, rural health professionals who spoke to MedCity News concur that this type of design would be practical. Implementing the model is not without its obstacles, which consist of stakeholder alignment and an absence of proficiency amongst rural medical facilities new to handling risk.
The private-public financing for core services modelIt is clear that the conventional fee-for-service design is not working for rural health centers. Rural populations are decreasing and, as an outcome, margins are not what they utilized to be for healthcare facilities in these areas, said Timothy Moore, president and CEO of the Mississippi Hospital Association and a member of the AHAs job force, in a phone interview.
With declining margins come widespread hospital closures. From January 2013 through February 2020, 101 rural medical facilities have actually closed, according to the Government Accountability Office.
” If [client] volume is not fantastic sufficient to substantiate and make [core] services possible going forward, then there needs to be some method to balance out those costs,” Moore said. “Thats where this [design] enters play.” The design involves companies and payers determining and concurring upon core, essential services and quality measures for recipients care. Payers provide funds to a swimming pool that will cover these services on a population, instead of a fee-for-service, basis.
Though 2020 left rural healthcare facility finances in tatters, payers saw strong returns, Moore stated. There is a clear opportunity for payers to partner with each other and suppliers to make sure a trustworthy line of funding for key services.
Healthcare facilities getting involved in the model will be required to work with a care organizer or navigator to make sure that patients have access to the services while preventing overuse. The health centers will likewise be accountable for fulfilling worked out quality measures related to the core services. Payers can lower future allocations to the pool if those are not met.
For the design to work, payers should devote to 3 years of participation. Any payers who decide to leave within that time period should pay a pre-determined penalty to the fund.
With its focus on population health, instead of patient volume, the design can help rural healthcare facilities not only keep traditional services alive however likewise permit them to deal with social determinants of health, stated Brock Slabach, vice president of member services at the National Rural Health Association, in a phone interview.
Transport, for example, was identified by the AHA job force as one of the most vital services in rural areas. Rural medical facilities normally do not have adequate money to provide transport despite the fact that it is among the biggest barriers to care in these areas, Slabach stated. This is where the design could help as it institutes a funding system allowing health centers to prioritize the services most needed by the neighborhoods they serve.
Real-world examples of the design at workVersions of the pooled financing design for core services are currently being piloted.
One is the Pennsylvania Rural Health Model, which intends to transition rural hospitals from fee-for-service to global spending plan payments. Run by the PA Rural Health Redesign Center Authority, the design was executed in January 2019 in collaboration with the Center for Medicare and Medicaid Innovation.
Per the model, the Centers for Medicare & & Medicaid Services and other taking part payers, consisting of state Medicaid companies and commercial insurance companies, pay participating rural medical facilities for all inpatient and hospital-based outpatient services through a global budget that is embeded in advance.
CMMI aims to have 90% of net patient profits for a getting involved hospital covered by the worldwide budget plan, stated Gary Zegiestowsky, executive director of the PA Rural Health Redesign Center Authority, in a phone interview. The remaining care is still repaid on a fee-for-service basis.
“So, for rural medical facilities that are having a hard time to make it through … it offers them financial stability to focus and operate on what they can do to transform and align their services to finest meet the needs of their community.”
The payers and companies getting involved in the model together develop the spending plan, in addition to the help of the Rural Health Redesign Center Authority.
There are provisions to adjust the budget if required. For instance, there is a “possibly preventable usage factor,” which represents care that shouldnt be delivered at a healthcare facility however is, Zegiestowsky stated. Savings are constructed into the spending plan to spend for that preventable utilization.
The model is in the third year of a six-year presentation schedule, and the feedback from participants has actually been favorable so far.
” We did a current service provider study, and 92% of all health center executives in the program think that the global budget plan design is helping them be more stable economically in addition to supplying a strong path to be able to change their companies,” Zegiestowsky stated.
Even more, the design appears to help in reducing expenses. An independent evaluation of Marylands variation of an all-payer international spending plan program, conducted by CMMI in 2017, suggests that it suppressed overall medical facility expenditures for Medicare beneficiaries.
As a result, other states have been inspired to consider global budgeting as a prospective financial option for their rural centers.
Dr. William Ferniany, CEO of the University of Alabama Birmingham Health System and member of AHAs rural health task force, has actually been attempting to implement a comparable flexible financing model in his state for several years.
Presently, Ferniany is working with a consortium that consists of leaders from Blue Cross Blue Shield of Alabama and the Alabama Hospital Association as well as the state commissioner of Medicaid and the head of Alabama public health to determine such a design, he said in a phone interview. And CMS Community Health Access and Rural Transformation, or CHART, payment model has actually stimulated their interest.
Launched last August, CHART involves 2 tracks: the Community Transformation Track and the Accountable Care Organization Transformation Track. In the first, CMS will choose 15 companies, including state Medicaid firms, regional public health departments and independent practice associations, to deal with getting involved health centers to implement new care models with federal funding. The second will include CMS choosing 20 rural-focused ACOs to receive sophisticated payments as part of joining the Medicare Shared Savings Program.
UAB Health System has actually looked for the design and is waiting on CMS to reveal the individuals in the fall of this year.
,” he said.
Hurdles standing in the way of implementationThough these payment models mean an innovative future in rural healthcare, it is necessary to keep in mind that they come with their own obstacles.
From a payer perspective, though a funding pool or international spending plan could help rural medical facilities survive, one major obstacle is the responsibility aspect, stated Von Nguyen, senior vice president and chief medical officer at Durham-based Blue Cross and Blue Shield of North Carolina, in a phone interview.
A member that purchases a Blue Cross strategy is entitled to a particular set of services, which might be different from what a rival is providing. Its up to each payer to be liable for the care they have actually assured their members when they jointly decide the core services that will be moneyed through the swimming pool, he said.
” You [may] lose that responsibility when you really pool the funds together,” he added.
Aside from the problem of member responsibility, Nguyen believes that not every hospital is ready for certain value-based models, including ones that involve capitated payments like the pooled funding system.
” It takes a fair bit of ability to handle a patient in a capitated design due to the fact that you get [a certain amount of money on the front end] and if you need to provide services and it costs more than you are getting in the capitated payment, the healthcare facility is on the hook for that– so its quite risky,” Nguyen stated.
Handling danger is an ability that medical facilities need to develop, and rural centers can have a tough time with that. This is where business like Kansas City, Missouri-based Caravan Health be available in.
The private-public funding swimming pool design is a terrific idea in theory, however rural providers battle with taking benefit of innovative brand-new techniques, stated Tim Gronniger, president and CEO of Caravan Health.
Caravan supports rural facilities and those disproportionately serving a low-income population to carry out and run value-based care models.
” We bring them innovation, we bring them know-how and coaching, and we become partners with them and share in the danger of these agreements,” Gronniger stated, in a phone interview.
Another source of battle for both suppliers and payers in this design is alignment, National Rural Health Associations Slabach stated.
Bringing different stakeholders with different interests and finding commonalities can be challenging, especially when financing is included. It can take an extraordinary level of collaboration to get everybody in the space to accept the same terms with regard to cost and quality steps, he said.
If performed as intended, the model and its different versions might change the way rural healthcare functions and is funded.
For UAB Health Systems Ferniany, the pooled financing model keeps the supreme goal of the healthcare industry front and center– taking care of the basic public.
” I utilized to see healthcare as a right,” he stated. “Now I see it as a public great. It has to be offered to everyone, much like clean water is a public great … And if we start to think of [health care] as a public excellent, [we] will spend for it in a manner that benefits the public.”
Image: claudenakagawa, Getty Images

By and big, rural health professionals who spoke to MedCity News agree that this type of model would be viable. Implementing the design is not without its difficulties, which consist of stakeholder positioning and an absence of know-how among rural hospitals brand-new to managing threat.
Hospitals getting involved in the model will be needed to hire a care planner or navigator to guarantee that clients have access to the services while avoiding overuse. This is where the model could assist as it institutes a funding system enabling medical facilities to prioritize the services most needed by the neighborhoods they serve.
In the very first, CMS will select 15 companies, including state Medicaid agencies, regional public health departments and independent practice associations, to work with participating health centers to execute brand-new care models with federal funding.